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Real estate golden goose loses its luster
P., the director of a real estate brokerage company in Ho Chi Minh City, said he recently tried to repay all his bank loans but he was unable to clear the last VND2 billion (US$120,000).
P. said he’d taken out all the loans to invest in real estate before the market began its slide.
Over the past five months, the slowing property market has hurt many investors like P., who said he was most recently burnt by a VND200 million (US$12,000) drop in the price of a plot of land in District 2.
The real estate losses means P. has cut the allowances for his employees by five times and halved his family’s spending.
With commercial banks now tightening loan policies, real estate investors have been left without a pillow to fall on.
Y., who has more than 20 years experience in the garment industry, decided to move his factory to the outskirts of HCMC so he could build an office building and two apartment blocks on the original factory site.
At first it seemed like a brilliant idea as demand for apartments surged last year, pushing prices as high as VND14 million ($845) per square meter.
But then building material prices also took off and commercial banks withdrew their support for Y.’s project.
Y. said he had to take out loans from prospective customers as he could not postpone his projects, which were already under construction.
But Y. is not the only one caught out by over-confidence in the real estate sector.
After gaining a degree in the US, N. returned to Vietnam and became a manager for a real estate company in the South Saigon New Urban Area.
As both land plots and high-ranking apartments were selling like hot cakes then, N. found the real estate business more lucrative than anything else.
Once he had enough money, N. established his own real estate company and made a substantial profit from two housing projects.
However, N. said he was now on the verge of bankruptcy because his projects were under investigation for lacking legal documents.
By launching projects with little regard for the law, N. and other investors have caused headaches for many people.
T., the owner of a car salon in District 1, is one of those affected by dodgy real estate deals.
Early last year, T. invested VND14 billion ($845,000) in dozens of land plots in a project in the southern province of Long An, sight unseen.
When land prices dropped, T. said she went to the project’s office only to find it deserted.
She then traveled to Long An Province and discovered the project had not been approved.
T. said she was taking legal action but with only faint hope she would recover her money.
Thanhnien
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